Will we enter a recession prior to November, 2020? I am skeptical. Does a bad month of jobs numbers indicate that? Well, the stock market moved up when those numbers came out, because investors saw it, not as a sign of an impending recession, but as an indication of a Fed interest rate cut, or at least, that's the common interpretation among stock market analysts. Should we defer to the business economists in the NABE survey? Uh... Predicting recessions is hard, and this is a good place for another reference to Philip Tetlock's Expert Political Judgment. Economists, in particular, are bad at making this kind of forecast.
In fact, Tetlock's general point is that Ph.D.s are no better than educated laypeople when it comes to forecasts, with some variation. The primary variation is that the worst forecasters are those with reductivist models (hedgehogs, rather than foxes-- get the reference?).
In terms of economics, I don't know if I count as a professional or an educated layperson. My degree is in political science, but I have rather more econ under my belt than most political scientists, and have published across lines. So... take that for what it's worth. I am more hesitant about predicting a recession.
The Fed will likely cut rates, but they don't have a lot of room to go. Tariffs are taxes, and they hurt the economy, but percentage-wise, we aren't talking about a big chunk of the economy. There are inefficiencies of a sort introduced, although the term "inefficiency" is... never mind. Anyway, adding it all up, we had 3.1% GDP growth in Q1. To go to two consecutive quarters of negative GDP growth on the basis of tariffs, or some other stuff...
It could happen. If Trump really goes hog-wild with tariffs, sure. This isn't imposing tariffs amid the Great Depression, though. The economy can absorb more with less damage. Not without damage, just less. It's still stupid, and undercuts the only thing protecting Trump, but my interpretation here is that recession predictions right now are, to some degree, people falling prey to the gambler's fallacy.
There hasn't been one for a while, so we're due. And that's not how the economy works.
Predicting a recession is hard. Trump's tariffs hurt the economy. This is all about magnitude, though. Bringing things down to two consecutive quarters of negative GDP growth? Magnitude matters.
Now, if the economists are right, Trump loses. If stock investors are right, he wins.
But they can't both be right. If the economists are right, then investors shouldn't have rallied on those jobs numbers because the danger of a recession was greater than the benefit of a Fed rate cut. If the investors are right, then the economists are overestimating the effects of a few parameters in their reductivist models.
Who's right?
Ask Philip Tetlock. Or, you know, wait. Forecasting a recession is bloody difficult.